Ripple Execs Slam SEC for Ignoring Court Ruling That XRP Isn’t a Security

Brad Garlinghouse slams SEC for ignoring the ruling that XRP isn’t a security. Bitnomial argues XRP futures should fall under CFTC, not SEC regulation.

U.S. District Judge Analisa Torres ruled in July 2023 that the XRP token is not a security, a decision that was widely seen as a partial victory for Ripple Labs and the broader cryptocurrency industry. However, the U.S. Securities and Exchange Commission (SEC) continues to insist that XRP is a security.

Ripple CEO Brad Garlinghouse slammed the SEC for disregarding the court ruling in his response to Bitnomial's lawsuit, which challenges the SEC's authority over XRP futures.

In a recent tweet, Garlinghouse expressed his frustration with the SEC, accusing the agency of acting above the court's decision that XRP is not a security. He also stated that the SEC's actions demonstrate a mentality of operating above the law.

A new low for a renegade agency many thought couldn't sink further. The SEC now believes it can operate above the law, ignoring a Court's ruling that XRP isn't a security. Team Ripple will be watching closely and weighing our own options to hold the SEC accountable. https://t.co/9yMWsNHRde

The SEC's stance in the Bitnomial case is significant because Bitnomial, a crypto derivatives exchange, is suing the SEC over its designation of XRP futures as "security futures."

Bitnomial argues that XRP futures should fall under the Commodity Futures Trading Commission (CFTC) because XRP is not considered a security itself. In its court filing, Bitnomial accuses the SEC of overstepping its authority and imposing excessive regulatory burdens on the exchange.

Bitnomial also highlights that the SEC's position directly contradicts the court's ruling, which found that XRP is not a security, further supporting Ripple's stance in the matter.

Ripple's Chief Legal Officer, Stuart Alderoty, also weighed in on the matter, questioning the credibility of a regulatory agency that disregards court rulings.

If this were a law school blue book exam, the hypothetical scenario would be: A regulatory agency loses in court but still threatens enforcement to pressure compliance, raising major constitutional concerns and further compromising the legitimacy of the agency. https://t.co/x7D7ZjH765

Alderoty argues that the SEC's aggressive measures are unconstitutional and ultimately damage the agency's credibility. He describes the SEC's behavior as a concerning example of a regulatory body attempting to push compliance through threats, even after being legally defeated.

The SEC's insistence on classifying XRP as a security has sparked concerns within the crypto community, with pro-XRP lawyer Bill Morgan and legal expert John Deaton both accusing the SEC of overreach and questioning its motives.

Deaton highlighted a recent case involving Digital Licensing, where the SEC was sanctioned for misconduct, which further adds to the skepticism surrounding the regulator's approach.

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